After years of takeover rumors, Jacksonville-based PSS World Medical Inc. announced a $2.1 billion buyout agreement this morning.
McKesson Corp., a San Francisco-based health care services company, agreed to buy PSS for $29 a share in cash, the two companies announced.
McKesson said it expects the merger to result in $100 million in annual cost savings, but it did not give details on what impact the deal will have on operations.
“The unified organization will bring extensive distribution capabilities, deep product and technology expertise and a broad portfolio of business services to an expanding industry, helping our customers improve efficiency and productivity, and deliver better care,” McKesson Chairman and CEO John Hammergren said in a news release.
PSS, which distributes medical supplies nationwide, is headquartered in Jacksonville’s Southpoint area, but the company had been looking for new headquarters space.
PSS announced a major corporate reorganization in May into four divisions. As part of the reorganization, the company recently announced an agreement to sell off its dental business and has been looking to sell its skilled nursing facility business.
“PSS World Medical and McKesson are both highly customer-focused companies with a shared commitment to strengthening the clinical success and financial health of caregivers by solving their most important problems,” PSS President and CEO Gary Corless said in the news release.
“This transaction positions the combined business to advance this shared mission and enhance the value we deliver to physicians and extended care customers. This combination creates opportunities for our team members and greater value for the shareholders of both organizations,” he said.
Corless will become chief operating officer of McKesson after the merger.
The buyout is subject to approval by PSS shareholders, but the deal announced before the stock market opened Thursday gives stockholders a big premium over the company’s recent stock price.
PSS’s stock closed at $21.60 on Wednesday.
The $2.1 billion buyout price includes the stock and assumption of PSS’s debt.
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